LOG 214: PROCUREMENT PRINCIPLES

i Course title: LOG 214: PROCUREMENT PRINCIPLES

ii Course aim: This course aims at providing an understanding of key concepts

related to procurement principles. The course enables students
to evaluate and apply different procurement techniques and
skills in acquisition of goods and services. Through this course,
students will be able to design and install procurement function
in an enterprise.

iii Course expected learning At the end of the course, students will be able to:
outcome(s):  Understand key procurement concepts, principles and
procurement requirements in various sectors
 Assess the roles played by procurement function in
different organizations
  Implement various activities required for installing the
buying function in an enterprise
 Apply alternative-buying methods

iv Course status-core or elective: Non-core

v Credit rating: 8 credit points

vi Total hours spent: 80
vii Course Content: 1. PROCUREMENT OVERVIEW
 Definition of procurement,
 Procurement objectives
 Procurement cycle
 Role of procurement in the supply chain
 Organizing procurement
 Procurement relationship with other departments in
different enterprises (service, manufacturing and
extractive).
2. RIGHT QUALITY
 Quality in procurement
 Determination and control of quality
 Specification Review and Development
 Supplier Assessment
 Inspection on Receiving
 Variety Reduction
 Value Analysis/Value engineering
 Standardization and Simplification for Productivity.
3. RIGHT QUANTITY DECISION
 The Interface with Stock Control.
 EOQ and ABC Decisions.
 “Push” and “Pull” Systems
 The Demands of the pull Systems.
 Materials Requirement Planning (MRP)
 Just-in-Time (JIT)
 Vendor Managed Inventory (VMI)
 Buyer’s Role in Purchase Quantities
 The role of Stock Control in Re-order point systems
4. LEAD TIME AND TIME COMPRESSIONS
 Time and Competitive Advantage
 Managing internal and External lead Times.
 Expediting
 Purchase Schedules.
5. SOURCING STRATEGIES AND RELATIONSHIPS
 The Source Decisions making process
 Competition and negotiation.
 Vendor Appraisal.
 Contracting.
  The Influence of market Structures
 Make or Buy.
 Local Sourcing.
 Distributor and manufacturer Sourcing.
 Single and Multiple Sourcing.
 Reciprocity.
 Supplier Development
 Patents
 Sub-contracting
 Auction
6. PRICE AND TOTAL COST OF OWNERSHIP (TCO)
 Pricing Theory.
 Pricing Tools.
 Purchase Timing.
 Statutory requirements on pricing
 Price analysis and Cost Analysis.
 Inflation and material Shortages.
 Types of prices and pricing Terms.
 Impact of Types of Contracts on Types of prices.
 Invoice management and payment Terms.
7. INTEGRATED DECISIONS
 Procurement under Different Sectors.
 Procurement Systems.
 Procurement of Capital Equipment.
 Services Procurement
 Commodity Procurement
 Value Analysis.
viii Teaching and learning Lectures, seminars, assignments and independent study
activities:
ix Assessment Methods: Test, Individual Assignment, Group Assignment and Final
examination.
x Reading list : Books:

 Baily P., et a,l .(2015). Procurement Principles and

Management, 11th Ed, London, Pitman.
 Benton, W. C ,(2014).Purchasing and Supply
 Chain Management, 3rd Ed, Mc Graw Hill.
 Lysons, K & Farrington B,(2012). Purchasing and
Supply Chain Management., 3rd Ed